Housing Inventory Rises: Investor Buying Opportunities
Active housing inventory exceeded 1 million listings for the fifth straight month through September 2025, up 17.66% year-over-year. Inventory remains 10-13% below pre-pandemic levels but continues climbing. The “lock-in effect” is weakening as 82% of homeowners now have rates below 6%, down from 93% in 2023. This creates buying opportunities for real estate investors who act strategically.
Inventory Growth Changes Market Dynamics
September marked the fifth consecutive month with over 1 million active listings nationwide. This represents significant improvement from the severe shortage of 2021-2023. Buyers have more options and less pressure to make rushed decisions.
The 17.66% year-over-year increase shows meaningful progress toward market normalization. More sellers are listing properties as rate anxiety eases. Days on market have increased from 20-25 days to 30-40 days in many metros.
Inventory levels still sit 10-13% below pre-pandemic baselines. The housing shortage persists despite recent gains. Demand continues exceeding supply in most markets, supporting property values and rental rates.
Lock-In Effect Gradually Weakens
Homeowners with mortgage rates below 6% now represent 82% of all borrowers. This percentage has declined from 93% in 2023 as more refinancing occurs. The Fed’s rate cuts are accelerating this trend.
Experts project 75% of homeowners will have sub-6% rates by December 31, 2025. That means 25% of borrowers face rates at or above current market levels. These homeowners feel less trapped and more willing to list properties.
Each percentage point decline in the lock-in effect releases thousands of homes to the market. September’s mortgage rates at 6.26% make the decision easier for sellers with 6.5-7% mortgages. The psychological barrier of moving from a “low rate” diminishes.
Regional Inventory Varies Dramatically
Fifteen states now exceed 2019 inventory levels. Texas leads with 32% more listings than pre-pandemic. Arizona shows 28% growth and Nevada reports 25% increases. Florida metros have 20-40% more inventory than September 2019.
Sunbelt and Mountain West states dominate the inventory surplus. New construction booms in these regions created oversupply. Developers built aggressively during 2022-2024 based on population growth projections that haven’t fully materialized.
Midwest and Northeast markets still face inventory constraints. New Haven, Rockford, and Syracuse show listings below 2019 levels. Limited new construction in these regions keeps supply tight despite rising demand.
DSCR Loans Help Investors Capitalize
Rising inventory creates negotiating leverage for property buyers. Sellers face competition from other listings and show more flexibility on price. Inspection repairs and closing cost concessions become more common.
DSCR financing lets you move quickly when opportunities appear. No tax return requirements mean faster processing. No employment verification eliminates delays. Properties that cash flow at 1.0-1.25 DSCR qualify immediately.
Current DSCR rates of 6.37-6.87% work well with improving inventory conditions. Lower purchase prices combined with solid rents create strong debt service coverage. Properties acquired in buyer-favorable markets often show 1.3-1.5 DSCR ratios.
Geographic flexibility matters during inventory transitions. DSCR loans finance properties nationwide without location restrictions. Target markets with rising inventory for better pricing while maintaining cash flow standards.
Inventory Growth Creates Smart Entry Points
Housing inventory growth of 17.66% year-over-year signals improving conditions for buyers. The weakening lock-in effect will continue releasing properties through year-end. Regional variations create opportunities in oversupplied markets while constrained regions maintain value.
DSCR financing provides the speed and flexibility investors need to capitalize on inventory increases. Focus on markets where rising supply meets your cash flow requirements. Act decisively when properties hit your investment criteria.
The experienced team at Pro Investor Capital brings over 20 years of expertise in DSCR loans—along with a diverse range of loan programs. Schedule a consultation with one of our experts today: https://proinvestorcapital.com/
Sources:
- Homes for Heroes – Housing Market Trends September 2025